Quick Note on the Death of ‘Plan B’
Avik makes the case that conservatives should cheer the death of “Plan B”:
Remember that continuing to spend money we don’t have isn’t free. Deficit spending is a tax increase on our children and our grandchildren, and on people who have done the responsible thing and built up their savings. Going over the cliff means that the accounting gimmicks are over. No more “temporary” this and “temporary” that, so that Congress can pretend to be more fiscally responsible than it’s actually being. Going over the cliff means that a broad swath of Americans will be required to pay for the enlarged government that they voted for in November. I don’t think that’s such a bad thing.
Peter Suderman, Philip Klein, Josh Barro, and Matt Yglesias all believe that the failure of “Plan B” sets the stage for a last-minute budget deal, as it will make Speaker Boehner more vulnerable and thus more pliable.
My tentative view is that we should go over the cliff and pass a substantial Orszag-style “tax-reform refund” for all wage-earners and Social Security beneficiaries. This would buy time for a more ambitious overhaul of the tax code while preventing a really severe fiscal contraction.